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PROPOSED RENEWAL OF MPS TRUST
In 1965 a trust indenture was established to govern the use of certain
lands and premises situated in the Town of Sidney BC. The historical
development of the trust arrangement is described in Appendix A
attached hereto. The original trust arrangement of 1965 named the Royal
Trust Company as trustee.
In July 1986, by decision of the Supreme Court of BC the Royal Trust
Company was relieved of its duties as trustee and the Sidney and North
Saanich Memorial Park Society (MPS) was substituted as trustee. Since
that time MPS has discharged its duties and responsibilities in
accordance with the original trust indenture of 1965.
The current MPS board of directors has reached the conclusion that the
1965 trust indenture needs revision in order to: faithfully discharge its
current operational duties and responsibilities; respond to the present
and future economic conditions affecting the MPS; and respond to
future developments of the usage of the lands and premises under trust.
The trust requires essential revitalization.
A draft indenture was prepared by MPS lawyers and carefully reviewed
by the current MPS board, a number of past MPS directors, and a
meeting of MPS members called to review the document. The objective
was to make necessary changes but still respect the fundamental purpose
of the Trust. The current draft Indenture, incorporating the
recommendations from this extensive consultation has received the
unanimous support of the MPS Board, past MPS directors, and MPS
members.
The MPS Board of Directors has instructed its lawyers to present the
current draft trust to the Supreme Court of British Columbia and request
that it replace the 1965 indenture.
Residents of Sidney and North Saanich who are currently beneficiaries
Under the trust are invited to provide comment on the proposed changes
to the Trust document by March 31, 2015 to [email protected]
Residents are also requested to advise if they would like to attend a
public meeting on the topic. If there is sufficient interest a public
meeting will be held 7 PM April 8, 2015 at the Mary Winspear centre.
Eleven Fundamental and Significant issues
addressed in the New Trust Indenture
There are eleven fundamental and significant issues to the new trust
indenture and they are discussed below.
1. BENEFICIARIES
This first change relates to the description and definition of the class of
beneficiaries outlined in the trust indenture of 1965.
1.
Current Description.
Currently the trust document of 1965 defines beneficiaries as
“residents of the Electoral District of Saanich whose names
appear from time to time on the then current list of voters of the
said Electoral District prepared under the Provincial Elections Act
and who reside north of the present North boundary of the
municipality of Central Saanich (as defined in Section 5 of the
Provincial Elections Act of 1960). “
2.
Proposed Change
The proposed indenture defines beneficiaries as “ all persons who
are resident within the Districts of North and Central Saanich and
the Town of Sidney”. This definition is proposed for the following
reasons:
1) The 1965 definition of beneficiaries is not representative
of the actual class of individuals who benefit from the trust
lands and facilities
2) The 1965 definition excludes those individuals who are
not of voting age or for any other reason not included on
the most recent list of voters.
3) The 1965 definition excludes all residents of Central
Saanich (whether they are on the voters list or not) many
of whom benefit from the use of the trust lands.
4) The 1965 definition of beneficiaries is unnecessarily
complex and inherently confusing.
2. BUSINESS ACTIVITY
The second change relates to the enumeration of the power of the trustee
(MPS) to carry on business activities.
2.1.
Current Description
The 1965 Trust Indenture describes in Sections 16 and 17 the
enabling powers of the MPS acting as trustee. In neither section
is the trustee granted specifically the power to carry on a business
activity nor is the power, however, precluded. The trust is silent
on the granting of the power to carry on a business.
The MPS is incorporated under the Society Act of BC and in
Section 2(2) of that Act the power to carry on a business activity
is specifically included. Therefore, the MPS, not acting as trustee,
has the business activity power. In addition, the MPS as trustee
has specifically the power to manage the lands and premises
under trust.
It has always been interpreted and assumed that included under its
management power the MPS has the power to carry on a business
including: hiring employees; leasing property; catering; running a
theatre; selling goods; and providing services. This interpretation
has gone unchallenged, but without the specific, enumerated
business power it has proven difficult sometimes to prove to a
granting authority that the MPS acting as trustee has the specific
authority to carry on a business,
2.2.
Proposed Change
It is apparent that the inclusion and enumeration in the trust
indenture of the authority for the MPS to carry on a business
would be clearly advantageous.
The proposed indenture gives the Trustee the express power to
carry on a business that compliments and furthers the carrying out
of the purposes of the Trust. This inclusion of a power to carry on
a business is proposed because it confirms the business activities
currently carried out by the Memorial Park Society as Trustee of
the lands.
It should be noted that the change provides only limited authority
to carry on a complementary business. It does not extend any
power to MPS to carry on business beyond the power contained in
the Society Act under which MPS is incorporated. The Society
Act limits business activity to those that are “ incident to the
purposes of the Society”
This amendment resolves any ambiguity and improves an
understanding of the trustee’s power. It is to be noted, however,
that the business power is not absolute. On the contrary the
proposed indenture, at Section V 1 (1) only gives the Trustee the
express power “to carry out on any part of the lands such uses or
activities that further the objects of the Trust, and that meet the
requirements of the relevant local authority as to permitted use”.
Section V 2 (1) provides that leases, agreements or licenses
entered into by the trustee must complement and further the
carrying out of the objects of the trust. This is an important
limiting factor and in practical terms it will ensure that the Trustee
cannot lease the trust lands for commercial ventures like shopping
centers or stand alone fast food outlets
This inclusion in the draft indenture to carry on a business is
proposed because it will confirm the scope of business activities
within the powers of the Trustee.
3. PURPOSE OF THE TRUST
3.1 Current Description
The 1965 Trust document provides that the Trust Lands and Premises
are to be held in trust for residents for community, cultural, athletic, and
recreational purposes.
3.2.
Recommended Change
Under the new Trust document the purposes or objects of the trust are to
hold the lands as a memorial to those who gave their lives in the service
of Canada during the wars or peacekeeping in which Canada has taken
part, and thereto to provide the lands are held in trust to advance the
community, cultural, athletic, and recreational lives of the Residents,
doing so in conformity with the law of charity.
The proposed change confirms the memorial aspects of the trust, and
ensures the property will be used for charitable purposes that benefit the
lives of residents.
4. Permitted use of funds from expropriation
4.1 Current Description
Article 12 of the 1965 Indenture provides. If all or any part of the Lands
and premises shall be expropriated then the Trustee shall use the
proceeds of such expropriation, after the payment of just fees and
expenses into the following trusts:
(a) for the purchase of other lands and premises. (Substituted
Premises)
(b) to hold the balance of the proceeds in trust for the
maintenance and improvement of the substituted premises.
4.2.
Proposed Change.
This article has been the subject of many interpretations and much
confusion over the years.
The change provides that expropriated funds can be:
i)
ii)
iii)
Used to purchase land and improvements on a new site.
and
Invested in Capital improvements on either a new site or
the existing Trust lands, and
Placed in an investment with the proceeds (interest or
capital gain) from the investment used for the
maintenance, management or improvement of any of the
MPS trust lands.
It only stands to reason that if a general trust asset is expropriated then
the expropriation funds should be available for the improvement of all
the remaining property and not exclusively for the substituted property.
The proposal ensures that trust assets are preserved and protected. It also
gives the Trustee the ability to invest trust funds in improvements that
most benefit residents.
5. RESIDENT OVERSIGHT AND DIRECTION
The present Trust document was prepared by the Sidney and North
Saanich War Memorial Society (SNSWMPS) in 1965 with the
expectation that the Society’s responsibilities would be given over to
Royal Trust with the residents of Sidney and North Saanich as
beneficiaries. SNSWMPS was dissolved soon after the Trust was created
and residents were given the authority to provide the oversight and
direction that SNSWMPS could no longer provide.
5.1.
Current Description
The current Trust document gives extensive powers for 15
residents to call a public meeting and direct certain actions be
taken including:
Clauses 6&7, can cause an investigation to be undertaken to
determine if any tenant is not carrying out its responsibilities with
respect to land use and the maintenance of the cenotaph area
Clause 8 gives residents the power to require the Trustee to
terminate any tenant on 30 days notice if the tenant is in breach of
it’s land use undertakings.
Clauses 9 10 &11, give residents the power to cause a referendum
to be called to determine if residents favour the termination of any
lease and the granting a lease to the municipality. If Residents
vote in favour, existing leases are to be cancelled on 30 days
notice and the trustee will “forthwith grant a lease of the Park to
the municipality”
Clauses13-15 gives power to residents in the event of an
expropriation of trust lands to identify alternative lands to be
purchases by the trustee to replace the lands and premises.
Clause 16 gives residents the authority to provide direction to the
trustee with respect to any matter whatsoever.
Clause 19 gives residents the power to initiate an application to
the courts to replace the trustee.
The powers and authorities of the residents have never been
exercised. Nevertheless, since residents do have this authority
under the trust, the trustee must include 30-day cancellation
provisions in every lease it enters into to ensure that it has the
capacity to comply to the letter of its obligations under the current
trust. This is a totally unreasonable impediment on the ability of
MPS to develop and improve facilities and services for its
beneficiaries.
5.2.
Proposed Change
The proposed trust document removes the specific powers given
to residents but provides the equivalent authority to residents as
they have under the existing trust in a much more practical and
effective way.
Membership in the Memorial Park Society has been expanded to
include any resident of Sidney, North Saanich or Central Saanich.
Everyone is welcome and encouraged to become a member of the
Society. They can attend all regular, special, and annual general
meetings. All members are encouraged to offer their opinions and
advice and to let their name stand for election to the board of
Directors.
MPS’s AGM is open, not only to members but to all residents, to
receive a report on the affairs of the Society. The agenda and
minutes for every meeting will be posted the MPS web site
Section 3.4 of the MPS bylaws and section 85 of the Society Act
allows any member, with the support of 10% members eligible to
vote, to require MPS Directors call an Extraordinary General
meeting.
In addition, anybody could seek a court order under Section 85 of
the Society Act to remedy a problem respecting the way MPS is
carrying out its responsibilities as a society or a trustee
6. POWERS OF TRUSTEE
This change relates to the enhancement of the powers of the MPS as
Trustee to enter into long-term leases.
6.1.
Current Description
Section 3 of the current trust gives the Trustee the power to lease
lands and premises for five years. The trustee has the further enabling
power to grant an option for a further five years as outlined in section 17
(a). The literal interpretation of these sections would lead to the
conclusion that no lease term can extend beyond 10 years. This is a very
serious constraint on MPS to achieve the best potential use of the trust
property. The best illustration of this limitation would be the use of Blue
Heron Park; where the opportunity to lease a portion of the property for
long-term athletic use (building a soccer clubhouse) would not be
possible if the term of the lease was limited to10 years.
6.2
Proposed Change
Under Section V 1 of the new trust, the trustee will have the power
to determine the appropriate term for any lease so long as the lease
serves the purposes of the Trust. This amendment will allow MPS
to lease Trust lands for uses consistent with the purpose of the
Trust that require a longer lease term to amortize the lessees
capital expenditure.
Section V 2 (1) of the new trust indenture introduces the idea that
the commercial arrangements could take the form of a license or
other use agreement as well as a lease. This recommended change
reflects the reality of the majority of MPS’s current commercial
activity at the Mary Winspear Centre.
7. APPOINTMENT OF SUBSTITUTE TRUSTEE
Generally courts will not permit a trust, the purpose of which is
charitable, to fail if its general intent is capable of achievement. As far as
possible the courts will preserve a charitable trust but not a society or
corporation acting as trustee. Courts will therefore support and
encourage the appointment of a replacement trustee if circumstances
require that such a change be made.
7.1.
Current description
Under clause 18 of the current document the trustee may make
application to the Supreme Court of BC to be relieved of its duties
of trustee and for the appointment of a replacement trustee.
Clause 19 also provides that 15 residents could initiate a process
that could lead to an application to the courts to replace a trustee.
7.2. Proposed Change
It is difficult to foresee the circumstances under which MPS
would willingly give up its role as trustee because the trust lands
and facilities are central to everything it does. Without the Trust
lands, MPS would essentially lose its reason for existence.
If circumstances ever did require MPS to give up its role of
trustee, there are two alternative trustee replacement possibilities
identified in the new agreement.
Under Clause XIII the trustee can apply to have the trust
amalgamated with another trust fund or not for profit Corporation
having similar purposes to MPS.
Under Section VII the trust could be transferred to the
municipality in which the lands are located.
Some may question if the Municipality acting as trustee would be
the preferred option. The reality is that MPS faces a continuing
financial challenge and could not continue its present role without
financial support from the municipalities. Most facilities similar
to the Mary Winspear Centre are owned and operated directly by
municipalities so the idea of a municipality taking over role of
Trustee could, at some future date, be the best option.
The new trust document in Section VII 1 provides that a
replacement trustee can be appointed only “in accordance with
documented legal advice”
Regardless of what is in the trust document, any resident can
apply to the courts to have a trustee replaced, or to challenge the
proposed replacement trustee.
8. POWER OF SALE
8.1.
8.2.
Current Description
The current trust is silent with respect to the Trustee’s
power to sell land held under the trust.
Proposed Change
The revised document in Section IV 2 expressly excludes the
power of sale or mortgage of Trust land to ensure it will be
available in perpetuity for the benefit of residents.
9. AMENDMENT OF TRUST
A charitable trust is created to survive in perpetuity. However many
things can happen over time affecting the operation of a trust and there
must therefor be a means to revise the trust document in response to
changing circumstances.
9.1.
Current Description
The existing trust document is silent on the amendment of the
trust document.
9.2.
proposed Change
Clause XII 1 in the revised document confirms that a revision to
the trust document is possible but only with proper legal advice
and process.
10. DESCRIPTION OF LANDS
A trust Document should clearly identify the property held under trust
10.1. Current Description
The current trust document includes a description of the lands, as
they existed in 1965 when the trust was created. Since that time a
portion of that land has been expropriated and removed from the
trust, and replacement land has been added.
10.2. Suggested Change
The revised Indenture includes a current description of the Trust
lands
11. RECOGNITION OF THE LANDS AS A WAR MEMORIAL
UNDER THE TRUST
The file indicates that the trust land was originally provided as a WW1
“war memorial athletic park and children’s playground”. The original
Sidney and North Saanich War Memorial Park Society was founded to
hold title to the land and ensure it was used for its intended purposes.
There was no formal trust indenture covering this undertaking. In 1924 a
cenotaph was added to the park in honour of the local men who lost their
lives in the Great War. The 1965 Trust Document included a number of
provisions to ensure the continued maintenance of the cenotaph and
surrounding area.
11.1. Current Description
In 1969 BC highways acquired the trust land on which the
cenotaph was located. In 1970 the cenotaph was relocated in front
of the Town of Sidney Municipal Hall. There are no other
provisions in the 1965 document recognizing the war memorial
aspects of the trust lands other than the reference to the cenotaph
area that is now removed from the trust lands.
11.2. Proposed Change
The new trust indenture will ensure continued recognition of the
memorial aspects of the Trust by recognizing the trust lands as a
memorial in the purposes of the trust. Clause IV 2 (1) of the new
trust also gives the Trustee the obligation preserve and maintain a
sculpture on the trust lands as a tribute to the sacrifices of the
veterans of the Canada’s Armed forces in the service of the nation.
MPS Trust Historical Background
Appendix A
HISTORICAL BACKGROUND TO THE SAANICH AND NORTH SAANICH
MEMORIAL PARK SOCIETY TRUST INDENTURE
1921
Sidney and North Saanich War Memorial Park Society (SNSWMPS) was
founded to hold title to a 12-acre parcel as a “war memorial athletic park and
children’s playground”.
1924
A “cenotaph” dedicated to the local men who died in WW1 was installed on
the land.
1952
The Sidney and North Saanich Community Hall Association (SANSCHA)
was formed and agreement was reached to construct the hall on SNSWMPS
lands.
1958
SANSCHA members completed the community hall.
1961
BC Highways expropriated a portion of land for Pat Bay highway.
1965
SNSWMPS and SANSCHA created a trust document and placed the land
under the management of a public trustee, Royal Trust. SNSWMPS was
dissolved and SANSCHA continued to manage the lands as a tenant of the
trustee.
1969
BC highways purchased additional land including land on which the
cenotaph was located.
1970
Cenotaph moved to a location in front of the Town of Sidney Municipal Hall.
1981
Town of Sidney expropriated additional lands
1983
Courts ordered the Town of Sidney to pay just over $500,000.00.
1985
The Sidney and North Saanich Memorial Park Society (SNSMPS) was
formed essentially reactivating the SNSWMPS that was dissolved in 1965.
1986
BC Supreme Court ordered that SNSMPS replace Royal Trust as Trustee.
SANSCHA continued management of the hall as tenant.
MPS focused on the development of Blue Heron Park and management of
the expropriation funds.
1993
SNSMPS assumed responsibility for the hall and all lands after SANSCA
was dissolved.
1999
SANSCHA Hall and the land it was situated on was designated as an
historical site by the Town of Sidney